Existing Home Sales, Sentiment Rising; Builders Slip

By Avi Salzman

Existing home sales rose to a seasonally adjusted annual rate of 4.79 million in October from 4.69 million in September (a figure that had been revised lower).

“The evidence continues to build that the housing market has turned the corner and it appears that the recovery is running ahead of our expectations and should perhaps be described as moderate rather than modest. Apart from the Northeast, where Hurricane Sandy may have postponed some closings at the end of the month, the major geographical regions show an acceleration in the pace of sales over the last three months compared to the last year,” noted John Ryding of RDQ Economics.

Homebuilder sentiment is also on the rise; the National Association of Home Builders said its index rose to 46 from 41, the highest level in more than six years.

“This is the seventh straight monthly improvement in homebuilder sentiment and this index has risen from a recent low of 13 in June 2011 (and now stands at the highest level since April 2006),” Ryding wrote.

Homebuilders fell on the news, although most remain in the black. KB Home (KBH) was recently trading 1.1% higher, and Lennar (LEN) was up 1.3%. Investors may be reacting to the downward revision of September sales estimates, or continuing a sell-the-news pattern that has held over the past few months even as builders have jumped.

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There are 3 comments

NOVEMBER 19, 2012 1:58 P.M.

Elduderino wrote:

Can anybody tell me why it is that, housing data and new homes data is the most bullish it has ever been since 2008 and yet home builder's stocks are falling? for example KBH has fallen from a three month high of about $17 to under $14 today and is one of the worst performing stocks Today despite such strong new home data including the data of earlier today, DHI similar pattern.

NOVEMBER 19, 2012 6:06 P.M.

Fred Finstone wrote:

Bout a year ago,when the gov when after them for those robo signing deals (and around the time home prices began their yr over yr price rise), banks stopped the flow of foreclosures to the marketplace, 58,500 vacant bank owned properties in Las Vegas alone just sitting there. Add all the underwater homes and you have your low inventory. As long as the jobs and credit pictures remain what they are banks will not be able to hold on to those vacant homes forever(some call em ghost or shadow inventory). This message not brought to you by the National association of realtors or any of it's brokers/agents or the financial media

NOVEMBER 19, 2012 11:10 P.M.

Andy Smith wrote:

All I have to say is that KB Home is horrible and buyer beware. See what they did in Florida at http://thekbhome.com

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